A 5-Step Strategy to Enter International Markets
13 November 2018
There are various companies who want to develop their presence in the international markets, but embarking on new territories without a proven strategy is dangerous. Understanding new territories, its customs, culture, and regulations will assist companies in tailoring their concept for that market. Additionally, companies should first identify their motives of entering the international markets. They should be willing to alter their current domestic strategies according to the requirements.
Tips to Ace your Business in International Markets:
A Thorough Research on Your Territory
Knowing the country’s customs and business etiquette beforehand is pivotal. For example, the Middle Eastern market or African markets operate entirely differently to the USA or Europe. Business executives also need to gather information on the country’s currency value fluctuation and import/export timelines.
Understanding the Laws Governing Business
The first major step in understanding the law is to consult a local representative. A person who can help in navigating any unforeseen obstacles and explaining all contract provisions and terminologies is worth the money. However, relying completely on a local representative could be a risky, so companies should have some alternative measures in place too.
A wise CEO will always study his/her competitors before entering a new market. Understanding the nature of competition, rivals’ approach, the obstacles they face, and how to surpass them contributes towards a successful business establishment.
Producing the product in the its home country and just shipping the surplus to a new country is the easiest way to enter foreign markets. Increased profitability, fewer expenditures, and minimal risk are the three major advantages direct exporting offers. The only issue in direct exporting is the communication gap between the customers and the company. However, hiring a trustworthy local distributor can address this issue.
Franchising is one of the most prevalent and popular strategies to enter the international market. However, it is essential for the company to have a strong worldwide reputation before they invest in franchising. The franchising business model is outstanding as it doesn’t need huge investments from the franchise, builds a reputable brand name, and earns a franchise fee.
This five-step primer has brought success to many established businesses. CEOs and other senior executives must think globally to build their brand’s international presence. They should be clear in conveying their offering so they can quickly gain the trust of their target market and potential customers.